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William Golangco Construction Corporation v. PCIB

G.R. No. 142830
March 24, 2006

William Golangco Construction Corporation (WGCC) and the Philippine Commercial

International Bank (PCIB) entered into a contract for the construction of the extension
of PCIB Tower II.
The project included, among others, the application of a granitite wash-out finish on
the exterior walls of the building
To answer for any defect arising within a period of one year, WGCC submitted a
guarantee bond dated July 1, 1992.
Portions of the granitite wash-out finish of the exterior of the building began peeling
off and falling from the walls in 1993. WGCCmade minor repairs after PCIB requested
it to rectify the construction defects.
PCIB entered into another contract with Brains and Brawn Construction and
Development Corporation to re-do the entire granitite wash-out finish after WGCC
manifested that it was "not in a position to do the new finishing work," though it was
willing to share part of the cost. PCIB incurred expenses amounting to P11,665,000 for
the repair work.
PCIB filed for the reimbursement of its expenses for the repairs made byanother
contractor. It complained of WGCCs alleged non-compliance with their contractual
terms on materials and workmanship.

Whether or not petitioner WGCC is liable for defects in the granitite washout finish that
occurred after the lapse of the one year defects liabilities period provided.

No. The autonomous nature of contracts is enunciated in Article 1306 of the Civil Code.

Article 1306. The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order, or public policy.

The provision/stipulation in the construction contract providing for a defects liability

period was not shown as contrary to law, morals, good customs, pubic order or public
In characterizing the contract as having the force of law between the parties, the law
stresses the obligatory nature of a binding and valid agreement. The courts will not
relieve a party from the effects of unwise, unfavorable, and confused contract freely
entered into.

After the lapse of the period agreed upon therein, he may no longer &e held
accountable for whatever defects, deficiencies or imperfections that may be discovered
in the work executed by him.


Sesbreo v. Court of Appeals

G.R. No. 117438
June 8, 1995

52 employees signed a contigent fee contract whereby they agreed to pay their lawyer
50% of back salaries that may be awarded to them.

Whether or not the stipulated amount is excessive or the contracts is unreasonable.

The courts find that the stipulated amount/contract is excessive, unreasonable, or
The contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, public policy xxx.
The contracts is against the public policy because it demands that said contract be
disregarded to protect the client from unreasonable exaction.
In such case, quantum merit (as much as he deserves), may be used in determining the
lawyers professional fees.
Under the circumstances, a fee of 20% of back salaries was held as a fair settlement.


Naawan Community Rural Bank, Inc v. Court of Appeals

G.R. No. 128573
January 13, 2003

Guillermo Comayas offered to sell to private respondent-spouses Alfredo and
Annabelle Lumo, a house and lot.
Private respondents made inquiries at the RD, they found out that the property was
mortgaged for P8,000 to a certain Mrs. Galupo, the couple thus asked Conrado to pay
the mortgage advancing money for such purpose.
Conrado executed a Deed of Absolute Sale in favor of the spouses Luna. And on June
9,1988, said Deed of Absolute Sale was registered in the register of deeds of the city
and a new title was issued in the name of the couple.
However, it turns out that it was already previously sold to Naawan Community Rural
Bank; it was then unregistered.
The Bank foreclosed on the property, purchased the same, and registered it
under Act 3344.
The Bank sought to eject the spouses. However, the latter countered with an action for
quieting of title.

Whether or not the right of the Naawan Bank will bind the third person, Lumo spouses.

No. The Court upheld the right of a party who had registered the sale of land under
the Property Registration Decree, as opposed to another who had registered a deed of
final conveyance under Act 3344.
Lumo spouses has a better right/title to the land.
The registration of the sale to the respondent Lumo Spouses under the Torrens system
was done in good faith, this sale must be upheld over the sale registered under Act
3344 to Petitioner Naawan RB.
If the real right is not registered, third persons who acted in good faith are protected
under the provisions of the Property Registration Decree. if in bad faith (actual
knowledge of the facts, not valid)

Ace Foods, Inc v. Micro Pacific Technologies Co., Ltd

G.R. No. 200602
December 11, 2013

MTCL sent a letter-proposal for the delivery and sale of the subject products to be
installed at various offices of ACE Foods.
ACE Foods accepted MTCLs proposal and accordingly issued Purchase Order No.
10002310 (Purchase Order) for the subject products amounting to P646,464.00
(purchase price).
After delivery, the subject products were then installed and configured in ACE Foodss
premises. MTCLs demands against ACE Foods to pay the purchase price
Instead of paying the purchase price, ACE Foods sent MTCL a Letter14 dated
September 19, 2002, stating that it "ha[s] been returning the [subject products] to
[MTCL] thru [its] sales representative Mr. Mark Anteola who has agreed to pull out the
said [products] but had failed to do so up to now.
ACE Foods likewise claimed that the subject products MTCL delivered are defective and
not working.

Whether or not ACE foods should pay MTCL the purchase price for the subject products.

Yes. a contract of sale is classified as a consensual contract, which means that the sale
is perfected by mere consent. No particular form is required for its validity even if
parties havent affixed their signatures to written form.
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds
upon the thing which is the object of the contract and upon the price.
Parties agreed to a contract of sale. A contract of sale has been perfected at the
precise moment ACE foods accepted the latters proposal to sell the subject products
in consideration of the purchase price of P646,464.0
Upon perfection of the contract, the parties may reciprocally demand performance, to
deliver and to pay purchase price respectively.
Since such claims of ACE were not adequately proven in this case, the same cannot be
sustained and ACEs Foods obligation to pay the purchase price and to accept the
delivery of goods remain enforceable and subsisting.

Frias v. Esquivel
G.R. No. L-24679
October 30, 1975


Sanchez v. Rigos
G.R. No. L-25494
June 14, 1972


Nicolas Sanchez and Severina Rigos executed an instrument entitled Option

toPurchase wherein Mrs. Rigos agreed, promised and committed to sell to Mr.
Sanchez a parcel of land for the amount of P1,510 within two years from the date of
the instrument, with the understanding that the said option shall be deemed
terminated and elapsed if Mr. Sanchez shall fail to exercise his right to buy the
property within the stipulated period.
Several tenders of payment in the amount of P1510 were made by Sanchez within the
said period but were rejected by Mrs. Rigos.
Defendant Rigos admitted some of the allegations of the complaint but also added as
a special defense, that since the contract between the parties is a unilateral promise
to sell, the same being unsupported by any valuable consideration by force of the CC
is null and void.

Can an accepted unilateral promise to sell without consideration distinct from the
price be withdrawn arbitrarily?

No. An accepted promise to sell is an offer to sell when accepted becomes a contract
of sale.
Since there may be no valid contract without a cause or consideration, the promisor is
not bound by his promise and may, accordingly, withdraw it. Pending notice of its
withdrawal, his accepted promise partakes, however, of the nature of an offer to sell
which, if accepted, results in a perfected contract of sale.
This case abandoned the rule stated in Art. 1479 adhered in SouthwesternSugar &
Molasses Co. vs. Atlantic Gulf and Pacific Co. that if the option is not supported by a
consideration which is distinct from the purchase price, offer may still be withdrawn
even if the offeree has already accepted it.
The offeror can not exercise this right in an arbitrary or capricious manner.
Cost against Rigos, if acceptance is made before withdrawal of the offer, it constitutes
a binding contract of sale although the option if given without consideration.
A bilateral reciprocal contract to sell and to buy was generated.



Yason v. Arciaga
G.R. No. 140517
January 28, 2005

Sometime in 1989, the children of respondent discovered the falsification and

therefore files a complaint with the provincial prosecutor in Makati. However, the
complaint was dismissed for lack of probable cause.
Undaunted, they again filed a complaint for annulment of 13 land titles. The RTC
dismissed their complaint.
On appeal, 13 land titles were declared null and void being a forged document. The
reason for this is that appellants claimed that the vendor was 82 years old, sick,
bedridden when she affixed her thumb mark in the contract of sale.

Whether or not the sale is null and void because of her incapacity to give consent.

Yes. A person is not incapacitated to enter into a contract merely because of advanced
years or by reason of physical infirmities impair his mental faculties to the extent that
he is unable to properly, intelligently, and fairly understand the provision of the said
Respondents failed to show a clear and convincing evidence that Claudia was deprived
of radon to give consent.